The signals are mixed for real... Its always easy looking back at the charts and it all seems so easy and you ask how did I miss that? Well, I will try my best to lay out the facts as of todat and lets see if my observations make any sense.
The $VIX shows that a possible reversal is coming, whicih may coincide with the $SPX touching its 50DEMA on a weekly chart. To support the reversal thesis, the # of stocks above 150 EMA is at 90% on all major indices, which suggests that the market is highly overbought and a pullback is imminent. However, the scary thing is that $NDX and other emerging markets, e.g., BRIC, have already passed and closed above its 50DEMA on a weekly chart. So, these clearly suggest that they are leading the markets out of the recession and we are in a new bull market.
It will be interesting to see if $VIX continues to pull down and close below the trendline, which will undoubtedly confirm the Bull market, atleast until the next bubble bursts (Currency crisis anyone? )
Pankaj
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